Thursday, January 24, 2013

Continuation -- iShares MSCI China ETF

This past Friday, the Jan2013 covered calls position in iShares MSCI China ETF was closed out by buying back the short Jan2013 call options.   Today, with iShares MSCI China ETF (Ticker Symbol FXI) trading at $41.75, a continuation of a covered calls position was re-established by selling the Feb2013 $41.00 calls.

The transactions history for this ongoing FXI covered calls position is as follows:
1/08/2013 Bought 1,000 FXI shares @ $40.619
1/08/2013 Sold 10 FXI Jan2013 $40.00 call options @ $.92
1/18/2013 Bought to Close 10 FXI Jan2013 $40.00 call options @ $1.70
1/24/2013 Sold 10 FXI Feb2013 $41.00 call options @ $1.12
Note: the price of FXI was $41.75 today when these options were sold

A possible overall performance result (including commissions) for this iShares MSCI China ETF covered calls position is as follows:
Stock Purchase Cost: $40,627.95
= ($40.619*1,000+$8.95 commission)

Net Profit:
(a) Options Income: +$337.10
= 1,000*($.92-$1.70-$1.12) - 2*$16.45 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If FXI assigned at $40.00): +$372.05
= ($41.00-$40.619)*1,000 - $8.95 commissions

Total Net Profit (If FXI assigned at $41.00): +$709.15
= (+$337.10 +$0.00 +$372.05)

Absolute Return if Assigned at $41.00: +1.7%
= +$709.15/$40,627.95
Annualized Return If Assigned (ARIA): +16.3%
= (+$709.15/$40,627.95)*(365/39 days)

No comments:

Post a Comment